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As we reach the end of 2016, I can’t help thinking: “What just happened?“. It’s been a year of unexpected (and far from conclusive) electoral outcomes. Renewed Cold War hostilities threaten to break out on a weekly basis. Sectarian conflicts have created levels of mass-migration not seen since the end of WWII. Meanwhile, there have been more celebrity deaths than I can recall in a single year. (And a Scotsman is the #1 tennis player in the world.)

The Brexit and Trump poll results are being cited as either examples of the new populist/nationalist politics, or proof that our current democratic systems are highly flawed. Either way, they are indicative of a certain public mood: anger fueled by a sense of despair at not being able to deal with the rapid changes brought about by globalisation, multiculturalism, modernisation and the “open source” economy. Ironically, both the Brexit and Trump campaigns relied heavily on the global technologies of social media, 24-news cycles and internet-driven soundbites (plus they surely benefited at various times from fake news, false claims and belligerent rhetoric).

As I write, I am in the UK, which is heading for a mini winter of discontent (with high-profile strikes in the rail, mail and airline sectors). The last time I was here about two years ago, there was a general sense of public optimism; now, post-Brexit, it feels very subdued, even depressed. Whether this is a delayed response to the Brexit result, or uncertainty about the exit process itself, it’s hard to tell. While the governing Conservative party leadership is struggling to implement the outcome of a referendum that many of them did not want (or expect), the opposition Labour party (whose own leadership was highly ambivalent about the Brexit vote) is busily re-enacting the 1970’s and 1980’s….

Speaking of the 70’s and 80’s, the return to Cold War hostilities has felt like an inevitability for the past few years, and if it weren’t so serious it might be the suitable subject of a satire by Nikolai Gogol. While the primary fault lines are again between the USA and Russia, there are some complications and distractions, that don’t paint as clear a picture compared to the past: first, the relationships between the US President-elect and Russia confuse matters; second, the ideological war has shifted from capitalism vs communism, to liberalism vs autocracy; third, the role of “satellite” states is no longer to act as proxies in localised disputes – these supporting characters might now provide the trigger for all out hostilities between the super powers.

The ascendancy of this new nationalism (within the USA as much as in Russia) and the increased autocratic leadership on display in democratic, theocratic, oligarchic and totalitarian regimes alike is a renewed threat to enlightened liberalism and classical pluralism. Hence the significance of failing democratic institutions and political leadership in the west – the vacuum they leave behind is readily filled by the “certainty” of dictatorship and extremism. With China added to the mix via recent maritime events, plus ongoing strife in the Middle East, the potential flash point for a new Cold War conflict might be in the Spratly Islands as much as Syria, Ulaanbaatar as Ukraine, or Ankara as Aden.

On a (slightly) lighter note, the number of celebrity deaths reported in 2016 could be explained by demographics: artists who became famous during the explosion of popular culture in the 50’s, 60’s, 70’s and 80’s are simply getting old. In terms of dead pop stars, 2016 was book-ended by the deaths of David Bowie and Leonard Cohen. Both were experiencing something of a renaissance in their professional fortunes, and each left us with some of the most challenging but enduring work of their careers. Of their surviving contemporaries, some might argue that Neil Young and Bob Dylan continue to keep the musical flame alive, but for my money, Brian Eno and John Cale are the torch bearers for their generation.

In a satirical end of year review in The Times last weekend, the following words were “attributed” to Bowie (someone known to understand, if not define, the zeitgeist):

“Sorry to bail, guys. But I could see the way things were going.”

Next week: Content in Context is taking a break for the holidays. Peace and best wishes to all my readers. Normal service will resume on January 10.

Last week I wrote about the importance of learning coding skills. This prompted a response from one reader, advocating the teaching of STEM (science, technology, engineering and maths) in schools: “Coding and the STEM subjects are our gateway into the future.” I would agree. But, as other commentators have noted elsewhere, we also need to put the A (for art) into STEM to get STEAM to propel us forward….

I recently attended a talk by renowned arts administrator Michael Lynch, as part of the FLAIR art event, where he expressed frustration at the state of the arts in Australia, the lack of a public arts policy, and the associated cuts to government funding. It can’t help that from John Howard onward, we have had a sequence of Prime Ministers who, while not total Philistines, have shown little enthusiasm, appetite or appreciation for the arts. And during Q&A, Mr Lynch referenced the conservative and “safe” nature of so much arts programming as evidenced by the lack of risk-taking and the stale and over-familiar choice of repertoire, although he did acknowledge some arts organisations were doing exciting work.

The debate then shifted to whether we need a new method to evaluate the benefits of a strong arts sector that is not purely dependent on economic terms or financial performance. It was not possible in the time available to come up with a suitable indicator, but I suggest we can derive a range of benefits from putting more emphasis on teaching, supporting and sponsoring the arts. This RoI might be measured in such terms as the following:

Enhancing creativity among students will benefit individual problem-solving skills and collective innovation;

A healthy arts scene is indicative of a balanced, self-assured and progressive society;

Participating in the arts can give people a sense of confidence and well-being;

Through art we can learn about culture, philosophy and history – especially of other societies;

Giving people the means to express themselves through art is an important outlet for their skills, talent and interests.

We agonize about the amount of investment in our Olympic athletes in pursuit of gold medals, and whether the money can be justified (goodness – Australia only just made the top 10!) But no-one (yet) has suggested it’s not worth doing, even if we don’t win as many medals as is often predicted. And of course, together with the wider popular entertainment industry, professional sports attract more dollars, airtime and support through sponsorship, advertising, broadcasting rights, gambling revenue, club memberships and merchandise than the arts could ever hope to.

Part of the challenge lies in the popular notion that arts are either elitist, worthy, self-important, or simply frivolous – which makes it harder to build an economic case for the arts, but which can also lead to the worst kind of cultural cringe. Also, if the arts are really doing their job, they hold up a mirror to our society, and we may not like what we see. Populist politicians can’t afford to be associated or identified with such critiques – either as the targets or as de facto protagonists – so would they rather be seen shaking hands with gold medalists (or attending a Bruce Springsteen concert…) than maybe attending a cutting-edge performance by The Necks?

The finalLean Start Melbourne event of 2014 was a Q&A with Dave McClure, tech entrepreneur, early-stage investor and founder of 500 Startups. It was certainly an ear-opening experience, as Dave laced his comments with enough expletives to fund a small start-up (if only the organisers had thought to provide a swear jar…).

But while he was vociferous in his refusal to answer questions like “what’s hot?”, or “where’s the next big thing?”, he did provide some refreshing insights on how founders and investors need to adjust their expectations on funding and returns.

Dave’s investing model is basically a numbers game – identify a large enough pool of startup opportunities, place smaller “bets” on each one, in the expectation that only 10% will succeed, and of those, only 10% will be really successful, and very, very few will reach an IPO – but the spread of successful bets should each return between 5x and 20x. Whereas, some investors still try to “bet on unicorns”, in the expectation of a 20x-25x exit every time. Such opportunities will be increasingly unlikely, as the technology costs of production continue to decrease, therefore startups don’t require the same level or type of funding.

Based on current trends, Dave sees huge potential in video commerce, mobile video, and anything that monetizes search – e.g., influencing followers via social media, and converting this traction to sales driven by personalised recommendations. He’s also big on Spanish- and Arabic-speaking markets, and “anything that arbitrages sexism and racism” – hence his interest in women and minority entrepreneurs.

Dave’s advice is pretty simple: get the product, market and revenue model right, and then build scale into the business as quickly as possible. As such, he hates people asking him his opinion on their startup ideas (“what do I know?”); instead, he emphasises the need to get paying (and profitable) end users plus building scale through marketing as the true proof of concept.

Throughout the evening, Dave talked a lot about unit economics – not just production costs, but the real cost of customer acquisition, and time to convert leads to sales. It was also interesting that unlike some speakers at previous Lean Startup events, he was not particularly negative towards startups developing enterprise solutions – rather, he prefers to segment clients based upon their decision-making and purchasing limits. So, he looks at revenues based on the respective number of end users, SME customers and enterprise clients, because of their different price points and procurement methods, as well as the different customer acquisition costs.

Finally, he encouraged potential startups to think of the “most boring and mindless” business activities or processes, and figure out ways to make them more interesting via apps that use gamification and social media tools.

A new year normally brings with it the usual predictions for the 12 months ahead. Sometimes, as with political elections, the World Cup, fiscal budgets and the Oscars, most informed commentators can usually hope to get at least one or two things right. But as a former colleague once wrote, anticipating new developments in technology is like “trying to predict the unpredictable”.*

Rather than attempting to gaze into a crystal ball, here are a few of my personal wishes** for 2014

Politics

I think it’s interesting that in 2013, two of the political leaders that generated most of the news were Margaret Thatcher and Nelson Mandela – and in both cases, it was their passing that dominated the headlines. Neither had been in power for many years, yet in death they were more noteworthy than most of today’s world leaders. Why? Well, a lack of truly charismatic politicians could explain it. But I rather think the lure of holding political office has been undermined by the need to micromanage the machinery of government – so rather than attracting visionary leaders capable of projecting big picture thinking, we mostly get a collective mediocrity blinkered by the spin doctors and party pollsters, and rarely willing to tell the public what they actually think or what they personally believe in, for fear of offending voters in marginal electorates. Whether or not you agreed with or liked their particular brands of politics, it was pretty clear that both Thatcher or Mandela actually believed what they were saying when addressing parliament, giving interviews, or delivering campaign speeches.

In 2014 it would be wonderful to see the return of political leaders who were not simply trying to avoid defeat at the next election. Even better, wouldn’t it be wonderfully refreshing to hear politicians willing to amend their policies because they have been persuaded by informed argument, prepared to admit that they might have got it wrong, and able to speak their mind without being accused of knee-jerk reactions or heretical u-turns; situations change, so shouldn’t our politicians be entitled to adapt and clarify their thinking accordingly?

Leadership

Which brings me to my next wish – a willingness to openly embrace situational leadership. Yes, organisations should have a clear purpose, stated objectives and well-articulated means for achieving them, but there also needs to be flexibility and the ability to adapt and evolve based on changing circumstances.

We hear a great deal about the need for diversity on boards, among executive teams and across the workplace generally. Much of the diversity debate centres on gender and ethnicity – which is fine, but we require organisations with greater cognitive diversity. Such diversity could help avoid group-think, constructively challenge the status quo and counter the underlying causes of institutionalised inertia.

Business

Unless you are a single-product company, with a unique and proprietary production process, a guaranteed market monopoly, and an endless supply of materials and customers, your business cannot afford to exclude alternative thinking or ignore external perspectives on your industry, your markets or your products and services.

Equally, in a low-growth/no-growth market environment, companies have to develop or acquire better strategic growth skills. Expansion via capturing market share (usually achieved by competing on price, and resulting in lower margins) will be hard to sustain, and will likely result in a race to the bottom.

My big wish for 2014 is that businesses in general, and service industries in particular, will recognize what their true value proposition is, and build strategies for competing on quality (not just on quantity). For example, unless you understand your cost structures, and can relate those to your customers’ perceptions of what they are paying for, you will either waste resources on stuff customers don’t value, or miss opportunities for serving them better.

Technology and the Internet

It’s hard to think of any significant developments in popular technology or on the Internet during 2013. Sure, there was some consolidation among social media platforms, and product rationalisation at Yahoo! and elsewhere; but apart from launching iOS7 and the iPhone 5, Apple did not bring any major new products to market. Although Apple’s global share of smart phone sales may be declining, it may simply be market maturation rather than any product advances from its competitors. (There is also evidence that in key markets, iPhone 5 has boosted Apple’s smart phone sales, and the iPhone 5 itself lays claim to being the most popular model.)

The Internet continues to grow exponentially, largely driven by social media and user-contributed content. But I’m not sure that our collective knowledge and wisdom have improved at a corresponding rate. (Plus, targeted and streamed advertising means it takes much longer to watch YouTube clips, resulting in a lower return on the time we invest in consuming content.)

I’m hoping that 2014 will herald the launch of Internet 3.0 – an on-line environment that is more informative, more insightful and more interactive, and which connects more intuitively between my desktop and mobile devices. (For example, various upgrades to iOS and their associated back-ups forced me to transfer manually a large archive of Notes from my iPhone 4 to my iCloud account, simply because Apple unilaterally changed the way legacy content was “recognized” between my iPhone and my iMac.)

Culture

Perhaps we should also wish for a slightly kinder and more caring social media environment in 2014 – and as I heard one media commentator observe this week, professional sports people and other celebrities should probably refrain from using social media after 11pm, even if they are only slightly inebriated. Anyway, at the risk of revealing some of my own prejudices and preferences, this is what I expect from 2014 in Culture.

First up, I don’t want to see any more of the following categories of movie: sequels, prequels, comic-strip franchises, CGI extravaganzas or anything containing anthropomorphism (unless it’s a Director’s Cut of “Animal Farm”).

Second, I eagerly await the end of geo-blocking for digital content – copyright owners, music labels, publishers, licensors/licensees, distributors and on-line retailers please get your act together, and don’t make it unnecessarily difficult for me to buy your content just because of where I happen to live.

Third, I’d like to advocate a special tax on reality TV shows – the proceeds of which will be directed towards alleviating human suffering, solving important world issues, or nurturing genuine artistic/culinary/terpsichorean talent.

Finally, I hope that David Bowie’s return to form with 2013’s “The Next Day” was not a fleeting reminder of past glories….